If you’re short on cash right now, you could get a quick $20 from an unlikely source.
Due to a settlement that was agreed on between retailers, music distributors, and a number of states, record companies have agreed to a payout exceeding $67 million to pay consumers back for CDs that they allegedly overpaid for.
In May of 2000, a class action suit was filed against music distributors and record labels for coercing retailers to sell music with a set minimum price and attempting to get stores such Target, Circuit City and Best Buy to stop selling at lower prices during a more than five year period beginning in January of 1995. If retailers sold CDs below a set minimum price, the labels threatened to cut them off from millions of dollars in promotional advertising.
The cash produced from the settlement will soon be up for grabs. Of the $143 million settlement, $44 million will be left for splitting up amongst consumers. Each consumer who bought a CD during the time period that price fixing occurred can file for the settlement money, and could get anywhere from $5 to $20.
The amount being offered to consumers is being divided by the number of people who file a claim, with the limit being $20 per person. If enough people sign up, and the amount per consumer is less than $5 from the settlement, then all proceeds will be split among the 43 states involved for use for charitable donations at their discretion.
As of now, only 1 million people have filed for the claim according to the Miami Herald. However, more than 8.8 million people can register and still claim money without the money going to charity. The cutoff date is Mar. 3, 2003, and a claim can be filed at www.musiccdsettlement.com
Ultimately, $75.7 million in CDs will go to charities, non-profits, libraries, and schools, and another $23 million was used to advertise the settlement on radio and to build the website to allow easy processing.
Have CD prices dropped recently? Many students don’t believe so, despite occasional $9.99 offerings at stores like Best Buy, and question whether the settlement will really bring prices down. “I think it’s worth it to send in for the money, but will this really affect the price of CDs in the future?” questioned Kiersten Kenny ’03.
Philadelphia lawyer Steve Stiengard of law firm Kohn, Swift ‘ Graft stated that “we believe that regardless of whatever the price the music was sold for, during the period concerned, it was higher than it had to be.”
The record companies claimed no wrong, but simply agreed to pay the settlement, leaving questions on whether prices will drop any further and whether it will help at all.
Nick Colello ’05 felt, “that if stores lower their prices on CDs it would help nothing. Download programs and CD burners and the increasing presence of this technology in the common household is slowly forcing places that sell music to either lower their prices in an attempt to attract more business or raise prices to earn more profit over each sale, leaving them in a no win situation.”
Summing up many students’ attitudes about CD prices, Marissa Lanteri ’04 said she’s “not buying CD’s anymore when it’s easier and more cost efficient to make them myself.”
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